Correlation Between Sonida Senior and Abercrombie Fitch
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Abercrombie Fitch at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sonida Senior and Abercrombie Fitch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonida Senior Living and Abercrombie Fitch, you can compare the effects of market volatilities on Sonida Senior and Abercrombie Fitch and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sonida Senior with a short position of Abercrombie Fitch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Abercrombie Fitch.
Diversification Opportunities for Sonida Senior and Abercrombie Fitch
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonida and Abercrombie is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Abercrombie Fitch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abercrombie Fitch and Sonida Senior is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sonida Senior Living are associated (or correlated) with Abercrombie Fitch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abercrombie Fitch has no effect on the direction of Sonida Senior i.e., Sonida Senior and Abercrombie Fitch go up and down completely randomly.
Pair Corralation between Sonida Senior and Abercrombie Fitch
Given the investment horizon of 90 days Sonida Senior is expected to generate 1.48 times less return on investment than Abercrombie Fitch. In addition to that, Sonida Senior is 1.32 times more volatile than Abercrombie Fitch. It trades about 0.05 of its total potential returns per unit of risk. Abercrombie Fitch is currently generating about 0.1 per unit of volatility. If you would invest 3,051 in Abercrombie Fitch on October 26, 2024 and sell it today you would earn a total of 9,291 from holding Abercrombie Fitch or generate 304.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sonida Senior Living vs. Abercrombie Fitch
Performance |
| Timeline |
| Sonida Senior Living |
| Abercrombie Fitch |
Sonida Senior and Abercrombie Fitch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Abercrombie Fitch
The main advantage of trading using opposite Sonida Senior and Abercrombie Fitch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Abercrombie Fitch can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Abercrombie Fitch will offset losses from the drop in Abercrombie Fitch's long position.| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. Pennant Group | Sonida Senior vs. InnovAge Holding Corp |
| Abercrombie Fitch vs. Urban Outfitters | Abercrombie Fitch vs. Foot Locker | Abercrombie Fitch vs. Childrens Place | Abercrombie Fitch vs. American Eagle Outfitters |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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